S&P 500 futures fall after Alphabet's revenue miss: Live updates
The S&P 500 and Nasdaq Composite fell Wednesday after mixed quarterly figures from Alphabet and chipmaker AMD led the tech sector lower. A decline in Apple also put pressure on the major indexes.
The broad market index dipped 0.2%, while the Nasdaq lost 0.5%. The Dow Jones Industrial Average hovered around the flatline.
Alphabet shares tumbled 8% after the Google-parent posted a cloud revenue miss as it ramps up spending on artificial intelligence, spooking investors who worried the megacap tech company will take longer to capitalize on its AI ambitions. Overall revenue for the period also came up short.
AMD shares were also lower by 10% after the company’s fourth-quarter data center revenue came up short of expectations.
“As it begins to transition to who’s going to bring [AI] to the masses, there’s going to be the haves and the have nots,” Mike Dickson, head of research and quantitative strategies at Horizon Investments, told CNBC. “There’s just a bifurcation that I think we’re going to continue to see as this AI theme matures.”
Dickson pointed to other AI-related names like Nvidia and Vistra, which rose 3% and 2%, respectively.
Elsewhere in tech, Apple dropped 1% after Bloomberg News reported that regulators in China were considering launching a formal investigation into the company’s App Store fees and policies.
This comes amid heightened trade tensions between China and the U.S. Over the weekend, the U.S. unveiled a 10% levy on Chinese imports. China then retaliated with tariffs of up to 15% on U.S. goods.
Wall Street is coming off a positive session. The Nasdaq Composite and S&P 500 rose Tuesday, gaining nearly 1.4% and 0.7%, respectively. The 30-stock Dow climbed 134 points, or 0.3%. The S&P 500 and Nasdaq were bolstered in part by strong results from Palantir, which hit a fresh record high during the session.
Versace-parent Capri tumbles 14% on mixed earnings
Shares of Capri tumbled 14% on Wednesday, after the parent company of Versace, Jimmy Choo and Michael Kors reported mixed fiscal third-quarter results.
In the last quarter, Capri reported adjusted earnings of 45 cents per share, while analysts polled by FactSet had expected earnings of 66 cents per share. Capri’s $1.26 billion revenue came in line with expectations.
“Overall, our business remained challenged during the quarter and we were disappointed with our results,” said CEO John Idol.
Capri also guided for full-year revenue and adjusted operating income that was below FactSet consensus. The stock’s Wednesday slide put it on pace for its worst day since Oct .25, 2024, when the share price was nearly halved.
— Nick Wells, Lisa Kailai Han
ISM services index at 52.8 for January, lower than forecast
Service sector activity grew at a slower than expected pace in January, according to an Institute for Supply Management survey released Wednesday.
The ISM services index posted a reading of 52.8%, down 1.2 percentage points from December and below the Dow Jones forecast for 54.3%. The survey gauges the percentage of businesses showing expansion.
New orders dropped 3.1 points, business activity was off 3.5 points and prices fell by 4 points, though the index was still a robust 60.4% and indicative of ongoing price pressures. Employment increased by 1 point to 52.3%.
—Jeff Cox
S&P 500, Nasdaq open in the red
The S&P 500 and Nasdaq Composite traded lower on Wednesday.
The broad market S&P 500 shed 0.2%, and the tech-heavy Nasdaq slipped 0.6%. Meanwhile, the Dow Jones Industrial Average rose 12 points, or 0.03%.
— Sean Conlon
Trade deficit swelled more than expected in December
Imports hit a record level in December, swelling the U.S. trade deficit to its highest level since the depths of the Covid pandemic, the Census Bureau reported Wednesday.
The deficit totaled $98.4 billion for the month, surging nearly 25% and even steeper than the Dow Jones estimate for a shortfall of $96.8 billion. Imports, which subtract from GDP calculations, rose to $364.9 billion, up $12.4 billion from November, while exports contracted to $266.5 billion, down $7.1 billion.
For the full year, the goods and services deficit was $1.2 trillion, up from $1.06 billion in 2023.
President Donald Trump is threatening to enact broad-based tariffs to slow the flow of fentanyl and illegal immigration, as well as to level the global playing field.
—Jeff Cox
Alphabet, Workday, PDD among the stocks making the biggest premarket moves
Check out the companies making headlines before the stock market open.
- Alphabet — The Google parent tumbled 7% after fourth-quarter revenue of $96.47 billion lagged the $96.56 billion estimated by analysts polled by LSEG. Alphabet also said it plans to invest $75 billion in 2025 as it expands its artificial-intelligence strategy, more than the $58.84 billion consensus estimate, according to FactSet.
- Workday — The cloud applications provider climbed 5.5% after announcing a restructuring plan expected to eliminate roughly 8.5% of the workforce.
- Uber — The ride-hailing company fell 5% after cautioning that the strong dollar could weigh on first quarter gross bookings. Uber’s fourth-quarter revenue of $11.96 billion beat expectations of $11.77 billion, according to LSEG estimates.PDD — The Chinese e-commerce platform lost about 7.1% after the U.S. Postal Service suspended inbound packages from China and Hong Kong “until further notice.” PDD, the parent of Temu, relied on a popular trade loophole known to keep prices low as it expanded in the U.S. The USPS later reversed course, saying Wednesday it would resume accepting packages from China.
For the full list, read here.
— Pia Singh
Uber shares fall after latest quarterly results
Shares of Uber fell nearly 5% in the premarket on Wednesday after the ride-sharing company posted better-than-expected fourth-quarter revenue but issued weak first-quarter guidance.
Uber said it’s forecasting gross bookings for the current quarter to come in between $42 billion to $43.5 billion. Analysts’ estimates were around the top of this range, according to FactSet.
However, revenue for the fourth quarter topped Wall Street estimates. The company posted $11.96 billion for the period, above the $11.77 billion that analysts surveyed by LSEG were expecting.
— Sean Conlon
Disney beats earnings estimates, but starts to lose Disney+ subscribers
Disney shares wavered after the media giant posted fiscal first-quarter results that exceeded expectations.
The company earned an adjusted $1.76 per share on revenue of $24.69 billion. Analysts polled by LSEG expected a profit of $1.45 per share on revenue of $24.62 billion.
However, the company said Disney+ subscriptions declined slightly during the quarter, adding that it expects another “modest decline” during the fiscal second quarter.
— Fred Imbert
Apple falls on report of possible China probe
Apple shares were down more than 2% in the premarket after Bloomberg News reported, citing sources, that Chinese regulators were thinking about opening an investigation into the company’s App Store fees and policies.
— Fred Imbert
Asia-Pacific markets mostly rise after Wall Street looks past U.S.-China trade spat to rise overnight
Asia-Pacific markets mostly rose Wednesday after Wall Street rose overnight, shrugging off Trump tariffs and China’s retaliatory measures.
Mainland China’s CSI 300 Index started the day up, but reversed course to fall 0.58% to close at 3,795.08.
Hong Kong’s Hang Seng index was down 0.97% in its final hour of trade.
Japan benchmark Nikkei 225 rose 0.09% to close at 38,831.48, while the broader Topix index gained 0.27% to close at 2,745.41.
South Korea’s Kospi rose 1.11% to close at 2,509.27 and the small-cap Kosdaq gained 1.54% to close at 730.98.
— Lee Ying Shan
Alphabet’s post-earnings drop is an ‘overreaction,’ Gene Munster says
Alphabet’s stock drop after its latest earnings results is an “overreaction,” according to Deepwater Asset Management’s Gene Munster.
Shares slid 8% Tuesday night after the Google-parent posted a cloud revenue miss — even as it ramps up spending on artificial intelligence — spooking investors who worried the megacap tech company will take longer to capitalize on its AI ambitions.
Alphabet posted Google Cloud revenue of $11.96 billion in the fourth quarter, lower than the $12.19 billion StreetAccount consensus estimate. The company said it will invest about $75 billion in capital expenditures in 2025, more than the $58.84 billion expected, according to FactSet.
Still, Deepwater Asset Management’s Munster said investors focusing on the cloud revenue disappointment are missing the point, saying that the AI hardware trade still has room to run.
“I think this is an overreaction,” Munster told CNBC’s “Fast Money” on Tuesday. “I think the stock should be flat-ish on these results, versus down 8%.”
“I think that this AI hardware trade still has another year or two years left in it,” he added.
— Sarah Min
Stocks making the biggest moves after hours
Check out the companies making headlines after hours.
- Alphabet — Shares dropped 7.4% after Google parent Alphabet posted a revenue miss. Fourth-quarter revenue of $96.47 billion fell short of the $96.56 billion expected by analysts polled by LSEG. On the other hand, earnings per share of $2.15 exceeded the $2.13 consensus estimate.
- Chipotle Mexican Grill — Shares of the burrito chain fell nearly 5% after fourth-quarter same-store sales rose less than expected and the company said the key metric would show only low- to mid-single digit growth in fiscal 2025. In the fourth quarter, Chipotle earned 25 cents per share, after adjustments on revenue of $2.85 billion. Earnings were stronger than expected, while revenue was in line with consensus expectations from LSEG.
- Electronic Arts — Shares of the video game company rose 1% even after Electronic Arts posted third-quarter results that exceeded expectations. Electronic Arts reported earnings of $1.11 per share on revenue, known as net bookings, of $2.22 billion. Analysts polled by LSEG had expected earnings of $3.07 per share on revenue of $2.32 billion.
— Sarah Min
Stock futures open lower
Stock futures opened lower Tuesday night.
S&P 500 futures and Nasdaq 100 futures slid 0.29% and 0.41%, respectively. Dow Jones Industrial Average futures was lower by 34 points, or 0.08%.
— Sarah Min